Monday, 8 January 2024

China Troubles. US Inflation. D. C. Sanity?

Baltic Dry Index. 2110 +24            Brent Crude  77.65

Spot Gold 2032                  US 2 Year Yield 4.40 +0.02

Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.

Cary Grant. To Catch A Thief.

In the Asian stock casinos, a wobbly start to the week, with Japan closed for a holiday and more trouble in China.

 

In better news, just possibly sanity is about to prevail in Washington D.C. and the US government wont start closing down on Friday January 19.

 

In not so good news, Boeing. But that’s well covered in popular media.

 

 

Hong Kong leads losses in Asia markets, China shadow bank Zhongzhi files for bankruptcy

UPDATED MON, JAN 8 2024 12:30 AM EST

Asia-Pacific markets reversed early gains on Monday, with Hong Kong stocks leading losses in the region.

The Hang Seng index plunged over 2%, dragged by healthcare stocks, while mainland China’s CSI 300 was down 1.15% after shadow banking conglomerate Zhongzhi Enterprise Group filed for bankruptcy liquidation late Friday.

In Australia, the S&P/ASX 200 fell 0.50% to close at 7,451.50, while South Korea’s Kospi lost 0.32% and the small-cap Kosdaq was flat.

Japan’s markets are closed for a public holiday, and will resume trading on Tuesday.

On Friday in the U.S., all three major indexes gained after a stronger-than-expected jobs report.

The S&P 500 ended Friday up 0.18%, while the Nasdaq Composite added 0.09% and the Dow Jones Industrial Average ticked higher 0.07%.

The U.S. economy added many more jobs than anticipated in December, with nonfarm payrolls growing by 216,000, compared with the 170,000 expected by economists polled by Dow Jones. The unemployment rate held steady at 3.7% in another sign of continued labor strength.

The report sent Treasury yields higher, with the benchmark 10-year rate touching 4.103%.

Asia stock markets today: Zhongzhi Enterprise Group, China shadow bank (cnbc.com)

China Evergrande's EV unit says vice chairman detained, stock plunges

January 8, 2024 5:21 AM GMT

Jan 8 (Reuters) - China Evergrande New Energy Vehicle Group (0708.HK) said on Monday an executive director Liu Yongzhuo, who is the firm's vice chairman, has been detained, sending the stock tumbling as much as 23% in resumed trade.

 

The electric vehicle arm of the embattled property developer China Evergrande Group (3333.HK) said Liu has been detained on suspicion of "illegal crimes" but did not elaborate further.

The shares, which were suspended from trading in the morning session pending the statement, fell to as low as HK$0.32 but have since regained ground and was last down 1.2%.

The stock plunged 18.6% in the first week of 2024 after it said last Monday that plans for it to sell shares to U.S.-listed NWTN (NWTN.O) had been scrapped.

 

Hui Ka Yan, chairman and founder of parent Evergrande Group, the most indebted property developer in the world, has also been under investigation for suspected crimes, according to a filing in late September.

China Evergrande's EV unit says vice chairman detained, stock plunges | Reuters

 

Dollar holds ground as US inflation data looms

By Rae Wee 

SINGAPORE, Jan 8 (Reuters) - The dollar was steady on Monday ahead of a key U.S. inflation report later in the week for further clarity on the Federal Reserve's monetary policy outlook, after markets got off to a hesitant start to the year as rate cut bets were pared.

The yen struggled near the 145 per dollar level pressured by a broad bounce in the dollar, while the Australian and New Zealand dollars were nursing losses having fallen sharply last week amid cautious risk sentiment.

Trading was thinned in Asia with Japan out on a holiday.

Against the yen, the dollar rose 0.05% to 144.67, extending its gain from last week when it jumped 2.6% on the Japanese currency, its best weekly performance since June 2022.

The kiwi edged 0.1% higher to $0.6248, after having slid 1.2% last week. The dollar index steadied at 102.38.

The greenback's rally was underpinned by a rebound in U.S. Treasury yields as traders tempered their expectations of the pace and scale of Fed cuts this year.

A reading on U.S. inflation due on Thursday could again alter those views, after data on Friday showed U.S. employers hired more workers than expected in December while raising wages at a solid clip, pointing to a still-resilient labour market.

 

However, a separate survey out the same day showed the U.S. services sector slowed considerably last month, with a measure of employment dropping to the lowest level in nearly 3-1/2 years, painting a mixed picture of the world's largest economy.


"On balance, the key labour market themes remain in place. The labour market is no longer as tight as it was earlier in the recovery as signalled by slower job growth, less turnover and slower wage gains," said economists at Wells Fargo of the nonfarm payrolls report.

"That said, job growth remains solid on an absolute basis even if it has slowed on a relative one, and the low level of layoffs remains encouraging.

"We suspect the FOMC will keep the Fed funds rate unchanged over the next few months as it awaits additional confirmation that inflation is durably on its way to 2%."

Market pricing now shows a roughly 64% chance that the Fed could begin easing rates as early as March, compared to a nearly 90% chance a week ago, according to the CME FedWatch Tool.

More

Dollar holds ground as US inflation data looms | Reuters

 

Finally, hopefully step one to a solution of the US debt ceiling, Federal government shutdown starting January 19th.

 

Congressional leaders reach $1.59 trillion deal on top-line spending, pave the way for deal to fund the government

Congressional leaders announced a $1.59 trillion deal on top-line spending Sunday as the government races to avoid a potential shutdown.

The deal establishes an overall spending budget of $1.59 trillion for the 2024 fiscal year, allocating $886 billion to military spending and $704 billion for non-defense spending, said Republican House Speaker Mike Johnson of Louisiana said in a Sunday note.

“After many weeks of dialogue and debate, we have secured hard-fought concessions to unlock the FY 24 topline numbers and allow the Appropriations Committee to finally begin negotiating and completing the twelve annual appropriations bills,” he wrote.

The deal comes as the House and Senate inch closer to a key Jan.19 deadline, when funding runs out for many federal agencies. Funding for the rest of the government expires on Feb. 2.

While the deal paves the way for a potential funding decision, and signals that both Johnson and Senate Majority Leader Chuck Schumer (D-N.Y.) are working in unison, a shutdown isn’t out of the question as parties continue to clash over key policy issues.

″“The framework agreement to proceed will enable the appropriators to address many of the major challenges America faces at home and abroad,” wrote Schumer and House Minority Leader Hakeem Jeffries (D-N.Y.) in a Sunday letter. “It will also allow us to keep the investments for hardworking American families secured by the legislative achievements of President Biden and Congressional Democrats.”

Johnson acknowledged that the spending levels would “not satisfy” all parties, or cut as much as many had hoped for, but offers a way to “move the process forward; 2) reprioritize funding within the topline towards conservative objectives, instead of last year’s Schumer-Pelosi omnibus; and 3) fight for the important policy riders included in our House FY24 bills.”

More

Congressional leaders reach $1.59 trillion deal on top-line spending, pave the way for deal to fund the government (cnbc.com)

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

The S&P 500 could crash by 30%, a recession is likely underway, and interest rates might not fall before summer, market prophet says

January 6, 2024

  • A market prophet says the S&P 500 could crash 30%, and a recession is probably underway.
  • Gary Shilling doubts the Fed will cut interest rates before summer, but sees a return to 1% or 2%.
  • Shilling prefers Treasuries to gold, predicts earnings will weaken, and expects many more layoffs

The S&P 500 could plummet 30%, a US recession may already be underway, and the Federal Reserve is unlikely to cut interest rates before the summer, a legendary market prophet has warned.

Gary Shilling, who served as Merrill Lynch's first chief economist before launching his own consulting firm over 45 years ago, delivered the dour outlook on a Rosenberg Research webcast in late December. He rang the alarm on company earnings, touted government debt over gold, and predicted layoffs would accelerate in the months ahead.

Shilling is known for making several correct calls in decades past, but financial markets and the economy have defied his dour forecasts in recent years. Here are his 10 best quotes from the webcast, lightly edited for length and clarity:

1. "I think we still can have a 25% or 30% decline in the S&P."

(The delayed impacts of the Federal Reserve's hikes to interest rates, and pressure on corporate profits this year, threaten to drive the benchmark US stock index as low as 3,300 points or its lowest level since the fall of 2020, Shilling said.)

2. "I like Treasurys. They're about the best credit in the world. If you worry about the federal government going broke, you better get your gold bars and AK-47 and a cave to go in."

3. "I just have never had any interest in gold. It has so many forces that push the price around: political risk, inflation, deflation, mining, what the central banks are doing, and so on. A lot of the time, those forces must basically cancel each other out."

4. "I think we're probably in a recession now. NBER wait until they get all the data in, the revisions, and everything else. By the time they make the call, it's about as handy as a pocket in your underwear."

(Shilling was referring to the National Bureau of Economic Research, a private organization that officially calls recessions, usually several months after they start.)

5. "Soft landings are pretty rare. There's only been one in the entire post-war period and that was in the mid-90s. I define a soft landing as the Fed raising its target rate and then lowering it with no recession. A soft-landing forecast is bucking history."

More

The S&P 500 could crash by 30%, a recession is likely underway, and interest rates might not fall before summer, market prophet says (msn.com)

Eurozone inflation rises to 2.9% after increase in energy costs

December data comes amid speculation over when European Central Bank will cut interest rates

Fri 5 Jan 2024 13.13 GMT

Inflation across the eurozone rose in December after an increase in energy costs, reversing six months of consecutive falls and easing the pressure on the European Central Bank (ECB) to cut interest rates.

 

Figures from the EU statistical agency Eurostat showed consumer prices across the 20-country bloc rose at an annual rate of 2.9% last month, up from 2.4% in November. Economists polled by Reuters had forecast a slightly higher reading of 3% for December.

 

The increase in the headline rate comes after the end of government support for utility costs, alongside a smaller annual decline in energy prices in December than in November connected to last year’s one-off subsidy in Germany.

In the flash estimate for December, inflation in food, alcohol and tobacco prices continued to moderate, easing some of the pressure on households across the bloc as the rate across those categories dipped from 6.9% in November to 6.1% last month.

The figures come amid speculation the ECB will begin cutting interest rates within months amid a worsening economic slowdown across the eurozone, having increased borrowing costs to the highest level since the launch of the euro.

Financial markets widely expect the world’s largest central banks to slash interest rates this year as inflation falls back after the shock from the Covid pandemic and Russia’s war in Ukraine, while there are growing fears of recession in several advanced economies.

More

Eurozone inflation rises to 2.9% after increase in energy costs | Inflation | The Guardian

 

Covid-19 Corner

This section will continue until it becomes unneeded.

‘It’s One of the Great Mysteries,’ Why COVID Spares Children

Children tend to have a survival advantage over adults when it comes to newly encountered viral diseases.

January 03, 2024  Updated:  January 04, 2024

 

Bali Pulendran, a professor of microbiology, immunology, and pathology at Stanford University, has researched a mystery unique to COVID-19 for two years.

“For almost every infectious disease, the most vulnerable populations are at the extremes of age—the very young and the very old,” he once said. “But with COVID-19, the young are spared.”

The picture surrounding this enigma is still incomplete, but answers are forthcoming.

Children Are Different

Children are not mini-adults. Depending on their age, they can have similar or very different responses to infectious diseases.

In the case of COVID-19, children generally experience a milder form of the disease.

“It’s an interesting question that no one has fully answered,” said Dr. Cody Meissner, a professor of pediatrics at Dartmouth College’s Geisel School of Medicine, in an interview with The Epoch Times. “Several theories have been put forward to try and explain this.”

The primary reason is that children have a faster innate immune system, often referred to as the first line of defense, compared to adults. This enables them to mount a robust defense against respiratory infections more quickly.

Another explanation is that children are more susceptible to respiratory infections, and some of these prior infections may provide them with a degree of immune protection against COVID-19.

Anatomically speaking, children not fully grown are at a disadvantage when exposed to respiratory diseases. They have smaller airway diameters, meaning more severe symptoms when the airways get inflamed or have mucus build up.

They also have a smaller lung capacity, making them more prone to hypoxia with respiratory infection, professor of immunology Kenneth Rosenthal, PhD, told The Epoch Times.

However, compared to adults, children have been found to have higher levels of innate immune cells in the nose, which can help eliminate viruses early on.

“SARS-CoV-2 targets ACE-2 and TMPRSS, and these are expressed more in older adults,” Dr. Lael Yonker, pediatric pulmonologist and the co-director of Massachusetts General Hospital’s pulmonary genetics clinic, told The Epoch Times. Children, in comparison, have fewer of both receptors, which may reduce the number of viral invasions.

More

‘It’s One of the Great Mysteries,’ Why COVID Spares Children | The Epoch Times

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

XING Mobility Debuts Next Generation Immersion Cooling Battery, the Game Changer for Electric Vehicles & Utility Power

06 Jan, 2024, 07:51 GMT

Taiwanese company unveils world-first Cell-to-Pack architecture, high-volume XM25 system, and groundbreaking safety test results

TAIPEI, Jan. 6, 2024 /PRNewswire/ -- XING Mobility, a leading provider of advanced EV battery systems, is making waves at CES 2024 with its next-generation Immersion Cooling technology. Founded by veterans of Tesla and Panasonic, XING Mobility has been at the forefront of this game-changing approach to battery thermal management since 2015.

Immersion Cooling is a game-changing approach to battery thermal management. Instead of relying on traditional air or liquid cooling systems, XING immerses battery cells in a special dielectric fluid. This fluid, engineered for optimal heat transfer, directly surrounds and envelops each cell, ensuring uniform and rapid cooling.

XING Mobility's showcase at CES 2024 features three global firsts:

  1. IMMERSIO™ Cell-to-Pack (CTP) architecture: This innovative design boasts a gravitational energy density of up to 200 Wh/kg and a volumetric energy density of up to 400 Wh/L, the highest in the world. This breakthrough allows for significantly larger battery capacities in passenger vehicles without sacrificing space, effectively addressing range anxiety.
  2. IMMERSIO™ XM25 Battery System: The first mass-produced immersion cooling battery pack, the XM25 offers 25 kWh of power and is readily available for both vehicle and Energy Storage System (ESS) applications. Extensive testing ensures its reliability, environmental resilience, and efficient power output.
  3. Unprecedented safety test results: XING Mobility will showcase the results of a rigorous three-nail penetration safety test conducted on an IMMERSIO™ battery pack at 100% State of Charge. Remarkably, the immersion cooling technology successfully contained the thermal runaway, preventing fire propagation. This test demonstrates the unparalleled safety and stability of XING Mobility's batteries.

XING Mobility's CES debut coincides with its strategic entry into the American market. This move, fueled by recent investments from Kubota and the U.S. government's focus on clean energy, positions XING Mobility to capitalize on the rapidly growing electric vehicle and construction machinery markets. The company actively seeks partnerships with U.S. dealers to accelerate the adoption of its groundbreaking technology across passenger vehicles, commercial vehicles, industrial machinery, and ESS applications.

"XING Mobility, with its exclusive immersion cooling battery technology and products, makes its debut at CES 2024, officially marking our entry into the American market," stated Royce YC Hong, Co-founder & CEO of XING Mobility. "We are committed to providing a safer and more stable choice for battery thermal management to the global market, rewriting the safety norm for industrial electrification, and realizing a globally high-efficiency sustainable future."

"The potential of XING Mobility's immersion cooling technology is truly transformative," said Ida Wu, General Manager of XING Mobility. "We are excited to showcase our innovations at CES and collaborate with industry leaders to drive the future of sustainable mobility."

XING Mobility will showcase its products and technology at LVCC West Hall Booth 6857 during CES 2024. Meanwhile, Ida Wu, General Manager of XING Mobility will participate in the "The Future of EV Batteries is Big'' seminar on January 10 from 10:00-10:40 at LVCC West Hall W219. The seminar will discuss the potential of electric vehicle batteries, how to overcome challenges posed by materials and costs while breaking the size limitations, as well as trends in electric vehicle batteries.

XING Mobility Debuts Next Generation Immersion Cooling Battery, the Game Changer for Electric Vehicles & Utility Power (prnewswire.co.uk)

Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.

 Socrates.

 

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